LEARNING OBJECTIVES

This lesson discusses on the topic on:

• Planning techniques and tools and their applications
• Decision-making
After going through this module, you are expected to:
• Apply appropriate planning techniques and tools in business decision-making.
Specifically, you should be able to:
• 1. Discuss decision-making;
• 2. Apply effective decision making in business situation;
FORECASTING
• Forecasting according to Schermerhorn (2008) is an attempt to predict
what may happen in the future.
• All planning types, without exception, make use of forecasting.
• Business periodicals publish forecasts such as employment and
unemployment rates, increase or decrease of interest rates, stock market
data, GNP/GDP data, and others.
• Forecast used either be quantitative or qualitative.
FORECASTING

• Opinions of prominent economist are used in qualitative forecast

while mathematical calculations and statistical analyses of
surveys/researchers are used in quantitative forecast.
CONTINGENCY PLAN
• Contingency plan must be prepared by managers, ready for implementation
when things do not turn out as they should be.
• Contingency factors called “trigger points” indicate when the prepared
alternative plan should be implemented.
• Trigger point - change in an attribute, condition, factor, parameter, or value that
represents crossing a threshold and actuates or initiates a mechanism or
reaction that may lead to radically different states of affairs.
SCENARIO PLANNING

• Meanwhile, planning for future states of affairs is a long-term version of

contingency planning and is also known as scenario planning.
• Several future states of affairs must be identified and alternative plans must be
prepared to meet the changes and challenges in the future.
BENCHMARKING

• Benchmarking, another planning technique that generally involves external

comparison of a company’s practices and technologies with those of other
companies.
• Its main purpose is to find out what other people and organization as well and
then how to incorporate these practices into the company’s operations.
BENCHMARKING
• External benchmarking a common benchmarking technique to search for best
practices used by other organizations that enable them to achieve superior
performance.
• Internal benchmarking is also practiced by some organizations when they
encourage all their employees working in their different work of units to learn
and improve by sharing one another’s best practices.
PARTICIPATORY PLANNING

• Participatory planning which refers to planning process that includes the

people who will be affected by the plans and those who will be asked to
implement them in all planning steps.
• Creativity, increased acceptance and understating of plans, and commitment to
the success of plans are the positive results of this planning technique.
DECISION-MAKING

• Decision–making is a process which begins with a problem

identification and ends with the evaluation of implemented solution.
 Step1: Identify the Problem.
The problem may be defined as a puzzling
circumstances or a discrepancy between an existing
and desired condition.

Step 2: Identify the Decision Criteria.

These are important or relevant to resolving the
identified problem.

Step 3: Allocate Weighs to the Criteria.

This is done in order to give the decision maker
the correct priority in making the decision.

Step 4: Develop Alternatives.

This step requires the decision to list down possible
alternatives that could help resolve the identified
problem.

THE DECISION-MAKING PROCESS ACCORDING TO ROBBINS AND COULTER

 Step 5: Analyze the Alternatives.
Alternatives must be carefully evaluated by the
decision maker using the criteria identified in Step 2.

Step 6: Select an Alternatives.

This is the process of choosing the best alternatives or
the one which has the highest total points in Step 5.

Step 7: Implement the Chosen Alternative.

This step puts the decision into action. Changes
in the environment must be observed and
assessed, especially in case.

Step 8: Evaluate Decision Effectiveness.

This is the last step and involves the evaluation of the
outcome or result of the decision to see if the problem still
exists, the manager has to assess what went wrong, if
needed, repeat a step or the whole process.

THE DECISION-MAKING PROCESS ACCORDING TO ROBBINS AND COULTER

DECISION-MAKING

• A decision is a choice among possible alternative actions.

• Like planning decision-making is a challenge and requires careful
consideration for both types of decisions; namely:
TYPES OF DECISIONS

• Structured or programmed decision - a decision that is repetitive and can be

handled using a routine approach.
• Unstructured or nonprogrammed decision - applied to the resolution of the
problem that are new or usual, or which information is incomplete.
DECISION-MAKING
• The decision-making condition are classified into certainty and risk or uncertainty
conditions.
• Certainty conditions - ideal conditions in deciding problems; these are situation in which
a manager can make precise decisions because the results of all alternatives are known.
• Risk or uncertainty conditions - a common conditions in deciding a problems. This
condition compel the decision maker to do estimates regarding the possible occurrence
of certain outcomes that may affect his or her chosen solution to a problem.